Global solutions

Abstract

Whereas many large financial firms operate on a global scale, resolution tools and powers as well as resolution financing mechanisms remain firmly in the hands of national or regional authorities. Consequently, the ensuing ‘financial trilemma’ may currently be solved only through advancing cross-border financial integration and national sovereignty at the expense of global financial stability. Within these parameters, the latter may be realized to a limited extent by some form of pragmatic territorialism, as embodied in the FSB’s Key Attributes of Effective Resolution Regimes for Financial Institutions. This chapter critically evaluates these international standards as the offered global solution for resolving the failure of cross-border financial firms.